Bond markets were weaker today with losses intact right from the start. There was brief respite heading into the afternoon, but then selling resumed, taking 10yr yields back to 2.60 and Fannie 3.5s as low as 102-05.

If much of the last two week's in May had seen a snowball of bond buying momentum, the last few trading sessions have seen the opposite. It's not quite as intense as the two main instances of positivity coming in the other direction, but the uphill snowball has had more staying power and covered more ground overall. In short, the last 4 days have been unpleasant.

The current environment is best thought of as a "volatile equalization" rather than a longer-term reversal in trend (2.57-2.60 was previously the lower end of the range, and we saw bounces at both those levels today). The tricky part about that is that it may indeed end up looking like a reversal in trend depending on the events in the coming days. If they move against us, rates could certainly continue higher.

All we know right now is that we're stretching the boundaries of the pre-ECB/NFP range. We don't know which way that range will break. Expect volatility to continue for better or worse.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

A recap of featured comments from the Live Discussion on the MBS Live Dashboard.

Matthew Graham : "I don't think we necessarily need to decide what it is. There's volatility ahead of major data. We're technically right on the edge of the year's main range and the subsequent "lead-off" range. I think that's a reasonable place to be, even if it's the less pleasant side of that lead-off range from a mortgage rate standpoint. "

Andy Pada, Jr. : "this is all positioning; this is a telegraphed move by market."

Christopher Stevens : "quote from MG "The biggest risk is that markets may have 'priced in' some amount of ECB easing this Thursday. In that case, even if the ECB lowers rates and announces asset purchases, it still might not be viewed as a net-positive for bond markets at current levels.""

Ted Rood : "Apparently expectations for ECB easing are fading."

Victor Burek : "we are still in the rumor part, news in Thursday"

Ted Rood : "buy the rumor, sell the news re: ECB announcement."

Sung Kim : "NFP ramp of course"

Brent Borcherding : "I'd view more as positioning before 3 days of market moving data."

David Rudnick : "Hey Guys, been out since Fri and skimming through the articles... no big reason for the sell off ? Can it just be "why did they go down in the first place""

Jay Rodriguez : "We have done them, even over 43% dti with compensating factors, though we are asking for 2 years tax returns & w2's, and VOE's if possible for old positions, and then all w2's and 1040's moving forward."

Ryan Kelly : "Joon, Borrowers still need to clear CAVIRS, so if they went bad on an FHA, VA, or USDA they cant use it"

John Paul Mulchay : "I didn't think it was that much extra work...just a few more returns to connect the loss of income docs."

Jay Rodriguez : "Its a lot of work, though it gives your borrower access to purchasing again without needing hard money."

joon choi : "is the fha back to work program worth it?"

Hugh W. Page : "I think we get what's expected from the ECB in terms of action which is an interest rate cut and along with that we get a change in forward guidance language hinting at more aggressiveness later if needed. Maybe something new and unexpected comes out of the guidance."

Bond markets were weaker today with losses intact right from the start. There was brief respite heading into the afternoon, but then selling resumed, taking 10yr yields back to 2.60 and Fannie 3.5s as low as 102-05.

If much of the last two week's in May had seen a snowball of bond buying momentum, the last few trading sessions have seen the opposite. It's not quite as intense as the two main instances of positivity coming in the other direction, but the uphill snowball has had more staying power and covered more ground overall. In short, the last 4 days have been unpleasant.

The current environment is best thought of as a "volatile equalization" rather than a longer-term reversal in trend (2.57-2.60 was previously the lower end of the range, and we saw bounces at both those levels today). The tricky part about that is that it may indeed end up looking like a reversal in trend depending on the events in the coming days. If they move against us, rates could certainly continue higher.

All we know right now is that we're stretching the boundaries of the pre-ECB/NFP range. We don't know which way that range will break. Expect volatility to continue for better or worse.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

A recap of featured comments from the Live Discussion on the MBS Live Dashboard.

Matthew Graham : "I don't think we necessarily need to decide what it is. There's volatility ahead of major data. We're technically right on the edge of the year's main range and the subsequent "lead-off" range. I think that's a reasonable place to be, even if it's the less pleasant side of that lead-off range from a mortgage rate standpoint. "

Andy Pada, Jr. : "this is all positioning; this is a telegraphed move by market."

Christopher Stevens : "quote from MG "The biggest risk is that markets may have 'priced in' some amount of ECB easing this Thursday. In that case, even if the ECB lowers rates and announces asset purchases, it still might not be viewed as a net-positive for bond markets at current levels.""

Ted Rood : "Apparently expectations for ECB easing are fading."

Victor Burek : "we are still in the rumor part, news in Thursday"

Ted Rood : "buy the rumor, sell the news re: ECB announcement."

Sung Kim : "NFP ramp of course"

Brent Borcherding : "I'd view more as positioning before 3 days of market moving data."

David Rudnick : "Hey Guys, been out since Fri and skimming through the articles... no big reason for the sell off ? Can it just be "why did they go down in the first place""

Jay Rodriguez : "We have done them, even over 43% dti with compensating factors, though we are asking for 2 years tax returns & w2's, and VOE's if possible for old positions, and then all w2's and 1040's moving forward."

Ryan Kelly : "Joon, Borrowers still need to clear CAVIRS, so if they went bad on an FHA, VA, or USDA they cant use it"

John Paul Mulchay : "I didn't think it was that much extra work...just a few more returns to connect the loss of income docs."

Jay Rodriguez : "Its a lot of work, though it gives your borrower access to purchasing again without needing hard money."

joon choi : "is the fha back to work program worth it?"

Hugh W. Page : "I think we get what's expected from the ECB in terms of action which is an interest rate cut and along with that we get a change in forward guidance language hinting at more aggressiveness later if needed. Maybe something new and unexpected comes out of the guidance."

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